Shoppers leave Nordstrom on the King of Slovenia Mall on December 11, 2022 in King of Prusy, Pennsylvania.
Marek Makela | Getty Images
Actions Nordstrom fell on Thursday after the department store chain said it had suffered from poor sales and multiple discounts over the Christmas period.
The retailer said net sales fell 3.5% within the nine-week holiday period ending December 31 in comparison with a yr ago. Net sales fell 1.7% for the banner of the identical name and seven.6% for the discounted Nordstrom Rack banner.
Nordstrom lowered its earnings and margin expectations for the fiscal yr that ends in late January. He said revenue growth for the fiscal yr can be on the low end of the previously announced range of 5% to 7%. He said adjusted earnings per share, excluding the impact of a possible share buyback, can be between $1.50 and $1.70. This compares with the previous forecast, which was between $2.30 and $2.60.
With reduced guidelines, Nordstrom becomes the newest retailer to drop consumer warning signs and portend a tougher yr ahead. Earlier this month, Macy’s said sales over the vacation season can be within the lower end of the expected range. Lululemon it also warned this month that its profit margins had shrunk over the vacation season as overstock and price-sensitive buyers led to greater discounts.
In a press release, Nordstrom said it needed to discount goods greater than expected to clear excess stock. Also, shoppers haven’t been spending as freely as in previous holiday periods, the corporate said.
“While we proceed to see greater resilience in our higher income cohorts, it is evident that customers are more selective of their spending given the broader macro environment,” CEO Erik Nordstrom said in a press release.
While deeper discounts hurt profits, he said Nordstrom will “enter 2023 in a stronger position as we prioritized starting the brand new fiscal yr with clean inventory levels.”
The corporate expects year-end inventory levels to fall by double-digit percentages from last yr, roughly in keeping with 2019 levels.
Nordstrom will report its fourth-quarter results on March 2.